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Re:Ask HN: What is your money-making side project outside pr... by opportune on Sunday April 21, 2019 @08:08PM (#19715368)
In addition to regular index fund investing I trade options sometimes. Been doing it for about 6 months now and I'm up about 90%. I am a lot more conservative than most options gamblers but it's still pretty risky. I put all my gains into high earnings stocks (currently buying STX and LYB) and at this point since I've almost doubled my principal, I could lose basically all my money currently allocated to options and have only lost 10% from my initial investment. I do it somewhat as a way to earn money but mostly for the experience, since I think it helps me learn a lot about how equities are priced and how the market reacts to news and macro events.

Rather than continually making bets just for the sake of making bets I only make trades when I think a stock overreacted to bearish news (meaning it's likely to rebound to its old price given that the business' fundamentals are unaffected), was oversold due to underperformance of other stocks traded alongside it, or is greatly overvalued due to some irrational hype (Lyft and most canadian weed stocks). And I sell quickly if the option loses a lot of its value or if the option greatly appreciates to lock in profits and limit losses.

Re:Ask HN: What is your money-making side project outside pr... by nigealj on Monday April 22, 2019 @05:44PM (#19723298)
I'd add trading Futures to the mix too or Options on Futures. The beauty with the Futures market is it's open 24/7(though liquidity might be a problem in the night) and there are only a limited number of futures markets/commodities you need to keep track of. Just stick to the S&P, Nasdaq, Treasury, Crude Oil & Gold. You can do some currencies if you like. Yes it's highly leveraged so more risky but that's why you make risk management front and center of any strategy you end up using to enter a trade.
Re:Ask HN: What is your money-making side project outside pr... by sidcool on Sunday April 21, 2019 @10:58PM (#19716087)
This is great. Any good resources to learn informed investing?
Re:Ask HN: What is your money-making side project outside pr... by opportune on Sunday April 21, 2019 @11:12PM (#19716173)
For options? I guess http://www.optionstrading.org/strategies/a-z-list/ is a good place to start. One way people just starting out with options fuck up is that they take out positions with a very large upside but also very high risk to ruin. It's like going to a roulette table basically. If you take out more complex positions you can limit your downside, make money on sideways movements, etc. You can also limit downside by setting up orders to sell above/below certain values too.

I read some finance textbook when I was just starting out, I think it was "introduction to derivatives and risk management". That helped too. It's a good, gentle introduction to derivatives and you can skip most of it unless you want to work for an investment bank.

I think the best way to learn is to just watch stocks overtime, and read up on the news relevant to them. That's really why I play with options, it keeps me plugged into following the movements of a bunch of different stocks, so I learn a lot about what makes them behave in certain ways. Definitely stay away from paid classes on investing or trading, those are almost all scams - if a "successful trader" has to teach paid classes they're not actually successful. And re: my strategy of trying to identify short term movements that make something under/over-valued and hoping it will correct, just realize that sometimes the market can stay irrational longer than you can remain solvent, and sometimes you just need to take the loss and get out.

One more thing I forgot. When I refer to "news" I mean real news. A lot of financial news websites are complete bot-written vacuous garbage. Real news is things like deals happening or falling through, large orders, interest rates, lawsuits, recalls, earnings, trade deals, etc.

Re:Ask HN: What is your money-making side project outside pr... by amerkhalid on Monday April 22, 2019 @03:34PM (#19722076)
I started playing with Options recently too. I read many books/blogs but "Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits" seems to be most helpful. Not sure if it is really a beginners book or not.

I mostly stick with SPY and it keeps climbing. I just buy 30-45 days out calls that are slightly out of money. Usually sell them at 20-30% profits with in a few days.

Of course, it is only 1-2% of my regular investments in index funds. Too risky to put any real money in options.

Re:Ask HN: What is your money-making side project outside pr... by opportune on Monday April 22, 2019 @03:51PM (#19722217)
It's less than 5% of my total investments too (I am young and don't have tons of money yet). I will check out that book, I've already got a good intuition for the greeks but don't know much theory on how to actually price them in if I were to sell options.

The thing I'd be worried about with medium term SPY calls is that you will be completely wiped out by a recession. Or even if a correction happened like in December and didn't rebound fast enough. Of course during a bull market that's a fine strategy (as long as theta/IV don't eat any potential profits) , and if you are socking away your gains it's probably fine. But if you are just growing your options allocation by 50% every couple weeks and then throwing it all back into the same position, eventually your double or nothing will come up nothing. Just something to consider

Re:Ask HN: What is your money-making side project outside pr... by krit_dms on Monday April 22, 2019 @02:52AM (#19717047)
Hull's Options futures and derivatives is the 101 for most things finance. Its a good place to start.

https://www.amazon.com/Options-Futures-Derivatives-English-S...

Re:Ask HN: What is your money-making side project outside pr... by opportune on Monday April 22, 2019 @03:08AM (#19717094)
I think that might have been it actually! Can't remember for sure
Re:Ask HN: What is your money-making side project outside pr... by wwasilev on Monday April 22, 2019 @12:20AM (#19716497)
What option strategies are you using?
Re:Ask HN: What is your money-making side project outside pr... by zornado on Monday April 22, 2019 @08:29AM (#19718362)
r/wallstreetbets :D

Just joking. Don't downvote please

Re:Ask HN: What is your money-making side project outside pr... by thymine852 on Tuesday April 23, 2019 @10:18AM (#19728800)
Could you please limit your low-effort "humor" and begging about downvotes to reddit?
Re:Ask HN: What is your money-making side project outside pr... by slothtrop on Wednesday April 24, 2019 @10:58AM (#19738977)
You created an account to say that?